Problem 7-24 (Algo) Companywide and Segment Break-Even Analysis; Decision Making [LO7-4, LO7-5] Toxaway Company is a merchandiser that segments its business into two divisions-Commercial and Residential. The company's accounting intern was asked to prepare segmented income statements that the company's divisional managers could use to calculate their break-even points and make decisions. She took the prior month's companywide income statement and prepared the absorption format segmented income statement shown below. Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Total Company Commercial $ 1,020,000 $340,000 Residential $680,000 669,800 180,200 489,600 350,200 159,800 312,000 $38,200 140,000 190,400 172,000 $ 19,800 $ 18,400 In preparing these statements, the intern determined that Toxaway's only variable selling and administrative expense is a 10% sales commission on all sales. The company's total fixed expenses include $60,000 of common fixed expenses that would continue to be Incurred even if the Commercial or Residential segments are discontinued, $86,000 of fixed expenses that would disappear if the Commercial segment is dropped, and $64,000 of fixed expenses that would disappear if the Residential segment is dropped.